ECB (European Central Bank)
ECB Accounts: Some members viewed inflation risks as tilted to downside
The accounts of the European Central Bank's (ECB) December policy meeting showed on Thursday that some members of the Governing Council viewed inflation risks as tilted to the downside, per Reuters.
ECB’s Lagarde: New tariffs could be inflationary in the near term
ECB President Christine Lagarde said during European trading hours on Wednesday that trade disputes between the US and the EU underscore the need for a deep review of how we organize the European economy.
ECB’s de Guindos: Financial stability risks remain elevated
European Central Bank (ECB) Vice President Luis de Guindos said in a speech during European trading hours on Wednesday that there are noticeable downside growth risks due to geopolitical woes.
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AUD/USD bulls have the upper hand amid divergent RBA-Fed outlooks
The AUD/USD consolidates the previous day's hawkish RBA-inspired gains above the 0.7000 mark, as a slight deterioration in risk sentiment benefits the safe-haven US Dollar and acts as a headwind for the Aussie. However, the diverging Fed-RBA rate paths favor bulls, suggesting that any corrective slide is more likely to get bought into and remain limited.
EUR/USD clings to daily gains above 1.1800
EUR/USD keeps the fresh bid bias around the 1.1800 region as the NA session draws to a close on Tuesday. The pair’s decent bounce comes on the back of fresh downside pressure on the US Dollar as investors continue to fade the so-called “Warsh trade”. Next of note on the euro docket will be the preliminary inflation data in the euro zone on Wednesday.
Gold recovers above $4,950 as US-Iran tensions boost safe-haven demand
Gold price trades in positive territory near $4,985 during the early Asian session on Wednesday. The precious metal extends the rebound after a historic and volatile sell-off last week. Traders weigh the next round of US economic signals and the broader demand for safe-haven assets.
Crypto winter began in January 2025, but end is near: Bitwise
The crypto market has been in a "full-blown" winter season since January 2025, following a 39% and 53% drop in Bitcoin (BTC) and Ethereum (ETH) prices from their all-time highs over the past few months, according to Bitwise Chief Investment Officer Matt Hougan.
Gold and silver recovery continues, but equities sink as tech is shunned
The risk recovery is on pause as we move through Tuesday. After signs that a recovery in precious metals could boost overall risk appetite earlier today, a nasty sell off in tech stocks has pushed the Nasdaq and the S&P 500 down by 1.7% and 1.1% respectively.
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what is the ECB?
The European Central Bank (ECB) is the central bank empowered to manage monetary policy for the Eurozone. With its beginnings in Germany in 1998, the ECB's mandate is to maintain price stability in the Eurozone, so that the Euro's (EUR) purchasing power is not eroded by inflation. As an entity independent of individual European Union countries and institutions, the ECB targets a year-on-year increase in consumer prices of 2% over the medium term. Another of its tasks is controlling the money supply. This involves, for instance, setting interest rates throughout the Eurozone. The European Central Bank's work is organized via the following decision-making bodies: the Executive Board, the Governing Council and the General Council. Christine Lagarde has been the President of the ECB since November 1, 2019. Her speeches, statements and comments are an important source of volatility, especially for the Euro and the currencies traded against the European currency.
who is ECB's President?
Christine Lagarde was born in 1956 in Paris, France. Lagarde, who graduated from Paris West University Nanterre La Défense, became President of the European Central Bank (ECB) on November 1, 2019. Prior to that, she served as Chairman and Managing Director of the International Monetary Fund (IMF) between 2011 and 2019. Lagarde previously held various senior ministerial posts in the Government of France: she was Minister of the Economy, Finance and Industry (2007-2011), Minister of Agriculture and Fishing (2007) and Minister of Commerce (2005-2007).
Lagarde on How to trade the ECB interest-rate decision
The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Prior to the rate decision:
- Many traders buy the rumors and square their positions shortly after the decision is made. For instance, if the market believes that the European Central Bank (ECB) will hike interest rates, traders buy the Euro (EUR) and close the position shortly after the announcement. On the other hand, if the expectation is a rate cut, traders will short the Euro and square the position after the announcement.
After the rate decision:
- If the market's expectations differ from the actual rate decision, there can be some excellent trading opportunities.
- If the market expects a rate hike but the European Central Bank ends up cutting rates, a short-term (1-2 hours) selling the Euro could be successful.
- If the market expects a rate cut but the ECB raises rates, a short-term long position on the Euro (1-2 hours) may be advantageous.
More generally, relatively high interest rates will usually result in a stronger Euro and vice versa.
Hike, cut or keep interest rates unchanged
The European Central Bank's (ECB) decision on interest rates always has an effect on the Euro (EUR).
When interest rates increase, the European Central Bank is selling government securities to large financial firms. In turn, the financial organizations are paying in euros for these securities. This effectively decreases the amount of currency circulating in the economy. A decreasing supply leads to higher demand and therefore causes the value of the Euro to appreciate.
When the interest rates decrease, the European Central Bank floods the market with euros. This is done by purchasing government securities from financial organizations. In return for the securities, these banks and financial deals are paid in euros, therefore increasing the supply of euros in the economy. As supply increases, the value of the Euro depreciates.
the world interest rates table
The World Interest Rates Table reflects the current interest rates of the main countries around the world, set by their respective Central Banks. Rates typically reflect the health of individual economies, as in a perfect scenario, Central Banks tend to rise rates when the economy is growing and therefore instigate inflation.
some concepts you need to know
In practical terms, QE means that central banks create money out of nothing to buy securities, such as government bonds. This new money swells the size of bank reserves by the quantity of assets purchased and that's why this programme is called Quantitative Easings. The money supply is intended to flood financial institutions with capital in an effort to stimulate lending and increase liquidity.
Much of the governments' debt is held by banks in the Eurozone and the ECB wants them to give more credits. If the European Central Bank buys government bonds, their prices rise and profitability drop even more. This is a liquidity-providing operation that weakens the value of the euro. This depreciation makes European exports cheaper and competitive, and ultimately, helps in recovering. In addition, as a result of the stimulus to internal and external consumption, the ECB combats the risk of deflation, a widespread and prolonged drop in prices, as well as the high unemployment.